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Skitter and Aereo

They sound like bad comic book character names, but Skitter and Aereo are two of the latest companies to jump into the video service game. Instead of trying to offer premium content, however, the two start-ups are going old school. They’re both selling traditional broadcast content over the Internet and optionally combining it with a DVR. (Skitter’s DVR service hasn’t launched yet, but is in the works.) On the plus side, you get decent-quality transmission of the prime-time networks, access to TV across a bunch of connected devices, and all the benefits of being able to pause live television, fast forward through commercials, etc. On the minus side, you have to pay a chunk of change every month (around $12) for content that’s supposed to be free.

Whether you like the idea behind Skitter and Aereo or not, the fact that they exist (for now) is an interesting commentary on the state of television. Both companies are offering a very basic content package with a few extra goodies. It reminds of my household circa 2008 when we steadfastly held on to analog cable and combined it with a subscription-free ReplayTV DVR. Most of our TV watching was still focused on the major networks, but the ability to get ESPN and decent reception had us paying a monthly fee to Comcast. Fast forward to today and we pay a much larger monthly bill to Verizon for TV. Granted that bill includes HD channels, a FiOS DVR, VoD, and a much wider selection of linear content, but it’s still tough to stomach when the invoice clears are mailbox every four weeks.

And so Skitter and Aereo enter the scene. Continue Reading…

Now that most of industry’s original interactive TV companies are dead and gone, Comcast may be looking to revive the one thing those iTV enterprises promised above all else – a way to access the web on your TV.

FierceCable’s Steve Donahue uncovered a patent application today detailing how Comcast might enable web-based search engines and TV-based commerce on cable set-tops. In the application, Comcast also notes that it could link its iTV platform to content from other video service providers, potentially knocking down a wall or two around the cable garden landscape. From the patent application summary:

The present invention is directed to content searching of various databases in an interactive television network; caching programming for rebroadcasting to interactive television network subscribers; and interactively offering goods and services referred to in broadcast programming to interactive television network subscribers.

There are certainly plenty of roundabout ways to do a little web browsing on your living-room TV set today, but it’s hardly common practice. In fact, the main reason connected TVs are growing in popularity is not because people want to surf Facebook or play Angry Birds, but because they want access to more content on the biggest screens they own. Presumably, Comcast is using this latest patent application to further its own content ambitions – not just opening up access to other video services where necessary, but making its own growing library of on-demand content available on a platform with increased interface flexibility, access to new distribution channels, and greater room for continued content growth.

The new patent application also falls in line with Comcast’s Xcalibur initiative and its overall transition to IP-based television. Comcast is currently testing the Xcalibur service in Augusta, Georgia, and reportedly has an all-IP set-top – something that would pair nicely with a new iTV platform – on its product roadmap.

Free VOD is where it’s at. According to Comcast, 70% of the nearly half a billion video streams that subscribers watch on demand comes from the free section of its VOD library. And, leaving subscription fees aside, Comcast thinks that content should be bringing in cash. So get ready for more ads with Comcast VOD, and, quite likely, with every other cable operator.

At a Broadcasting & Cable and Multichannel News event yesterday, several cable and programmer folks got together to talk about “advanced” advertising. The term covers everything from interactive ads, to dynamic ad insertion, to cross-platform campaigns, but there was significant focus yesterday on VOD commercials. That’s because a cableco consortium known as Canoe recently ditched efforts to create a national platform for selling interactive ads, and instead decided to spend all of its resources on video on demand. (Canoe laid off 80% of its staff in the process too. Ouch.) With all of the flexibility on the web, the cable industry has been fighting to catch up in the advertising revenue game. Operators have all this premium, time-shiftable content, and yet with little ability rotate new ads in an out of on-demand programming, they’ve felt hamstrung. In 2012, they’re finally ready to do whatever it takes to change that. Continue Reading…

Aereo logo and antenna array

Fox network creator Barry Diller introduced a new over-the-top video service yesterday called Aereo. Many are already calling it dead in the water, but there are several reasons I’m more optimistic about Aereo than competitive OTT services launched in recent years.

To take a step back, Aereo is offering a service that delivers broadcast TV stations over IP and bundles them with a DVR. Stations are available on iOS and Roku devices, with Android, PC and Mac browser support scheduled to kick in by mid-March. The service is $12 a month, and is currently invitation-only in New York. Aereo will open up to the public in NYC on March 14th.

In order to be successful, Aereo will have to deliver stellar quality of service. These are free broadcast TV channels after all, which means people can use their own antennas to get the same content at no cost. However, in addition to the DVR add-on (which is pretty compelling in itself for today’s non-cable households), Aereo promises decent picture quality – no need to futz with antenna positioning or manipulate around dead zones. That’s a potential combination of DVR, picture quality and convenience. Not bad.

In addition, I think Aereo’s got a few other things going for it:  Continue Reading…

Dave threw the gauntlet down back in 2006(!) when he suggested the Xbox was a Trojan Horse, designed to be activated in the future as a central device in the connected living room. Today, that reality has, in many ways, come to pass. According to Microsoft exec Russ Axelrod, more than 20 million Xbox homes are connected to Xbox accounts, and of the total time users spend on their Xbox consoles, 44% is dedicated to non-gaming activities. Analyst firm SNL Kagan points out that in addition to those 20 million Xbox-connected homes, there are also 30 million homes in North America connected to PlayStation Network accounts. That’s 50 million households with connected game consoles. Not a shabby number considering there are roughly 120 million households across the entire US.

Yet despite the growth of connected platforms, the world of distributed entertainment is still limited, at least where TV is concerned. The Xbox can be used as a set-top, but Microsoft has shed its ambitions to become virtual MSO thanks to the high cost of content licensing. And while cable industry veteran Jeff Baumgartner thinks that change is coming, there are still a lot of messy battles to be fought where streaming rights are concerned. The soldiers have emerged, but the war for the connected living room is far from over. It may be several years yet before the victors are decided.

Both Time Warner Cable and Cablevision have announced TV Everywhere updates with promises to bring live streaming to more devices. Beyond iPads, the new platforms they plan to support include laptops, game consoles and select smart TVs.

While I’m all for any extra features the cablecos want to throw at us, an expanded ecosystem of supported devices isn’t top on my list. In Time Warner’s case, how about making more content available? Or for any of the MSOs, how about extending streaming outside the house? Cablevision has hinted that it’s working on opening up the geographic boundaries for its app, but there’s no concrete word on when that might happen. And given the heated retransmission battles that continue elsewhere, I have to wonder if this particular streaming fight with content owners will get solved outside of court.

Meanwhile, I’m also curious to know how much demand there is for live mobile streaming. If I want to place-shift my TV, it’s usually to get access to on-demand shows. Or if there is a live event I want to hit, it’s usually coming from ESPN. (Gotta love WatchNow) Perhaps this isn’t a battle cable companies should even be fighting? How much do we need live TV on the go?

Reuters dropped a veritable bombshell yesterday when it reported that Verizon has plans to launch a streaming service in 2012 to compete with Netflix. It wasn’t a bombshell because Verizon’s never talked about this before. After all, we got an inkling of the operator’s plans at CES last January. It was a bombshell because the report follows last week’s announcement of a major spectrum deal between the telco and its cable competitors. The combination of news has many speculating about what Verizon plans to do with its FiOS TV service, and all that fiber it’s got in the ground.

First off, here are some of the facts. Reuters says Verizon is currently in talks with prospective programming partners about a new standalone video service. The service would not be tied to FiOS TV, and it would be made available outside of existing FiOS markets. Sources for Reuters say content for the service would be limited, possibly focused on movie packages and/or children’s programming.

Assuming Reuters’ information is accurate, what we don’t know yet is how a new streaming service would fit into Verizon’s overall video and broadband strategy. Some are suggesting that Verizon is giving up on its wireline infrastructure in order to focus on wireless. After all, why not ride someone else’s pipes for video, and dedicate valuable internal resources on developing the company’s newly acquired spectrum? The problem with that theory is that Verizon’s wireline infrastructure – aka its fiber-to-the-home network – is a huge competitive advantage. Not only has it allowed the telco to sign up 5 million FiOS TV subscribers, it’s also given Verizon a huge leg up on cable with Internet delivery.

Going forward, I believe Verizon will use its proposed on-demand streaming service as a way to gain incremental revenue and fill the gaps where it can’t reach subscribers with its FiOS TV offering. It seems likely that the operator will market the new service with its wireless packages, possibly offering discounts for a different kind of bundle when consumers are willing to sign up for both cell phone coverage and streaming content. I believe the new service will buy Verizon new customers and a new revenue stream, but that it won’t negate the value of the company’s wireline assets. Instead, it will give Verizon time to sort out when it should invest in further fiber deployments, ultimately extending the footprint for its full FiOS TV and Internet service.

When it comes down to it, Verizon’s fiber network is the ace up its sleeve. All that bandwidth means better control over video quality, and it means more capacity for consumers who want to download and upload lots and lots of stuff on the Internet. Wireless networks are great, but they have their limitations. Verizon can focus on 4G rollouts now, but that doesn’t mean it should or will abandon any fiber plans for the future. There are too many advantages that come with Verizon’s network in the ground.